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Hiking Americans' minimum wage to $15 per hour would give millions of Americans a raise but would kick a smaller share of people out of work (presumably never to return as their skills are now priced out of the market) according to a new report from the Congressional Budget Office.
Effects of the $15 Option on Employment and Income.
CBO - Estimate - Option - Workers - Week
According to CBO’s median estimate, under the $15 option, 1.3 million workers who would otherwise be employed would be jobless in an average week in 2025. (That would equal a 0.8 percent reduction in the number of employed workers.) CBO estimates that there is about a two-thirds chance that the change in employment would lie between about zero and a reduction of 3.7 million workers.
In addition, in an average week in 2025, the $15 option would increase the wages of 17 million workers whose wages would otherwise be below $15 per hour, CBO estimates. The wages of many of the 10 million workers whose wages would be slightly above the new federal minimum would also increase.
Option - Family - Income - Variety - Ways
The $15 option would affect family income in a variety of ways. In CBO’s estimation, it would:
Boost workers’ earnings through higher wages, though some of those higher earnings would be offset by higher rates of joblessness;
Nation - Output - Reduction - Employment - Decline
Reduce the nation’s output slightly through the reduction in employment and a corresponding decline in the nation’s stock of capital (such as buildings, machines, and technologies).
On the basis of those effects and CBO’s estimate of the median effect on employment, the $15 option would reduce total real (inflation-adjusted) family income in 2025 by $9 billion, or 0.1 percent.
Effects - Income - Changes - Families - Changes
The effects of those income changes would vary across families. Changes in earnings would mainly affect low-income families, but many higher-income families would be affected, too. The loss in business income would be mostly borne by...
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